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FTC Refunds Consumers $596,000 for Phantom Payday Loan Scheme

April 13, 2016, Written By Lynn Oldshue

The Federal Trade Commission is sending out over 1,700 checks totaling $596,000 to consumers who were victims of a phantom payday loan scheme last year. Under the scam, consumers were asked to pay on payday loans on which they did not actually owe money.

Several groups were involved in the phantom loan scheme, including Broadway Global Master Inc., Kirit Patel, and In-Arabia Solutions Inc. Callers working for the organizations would pose as law enforcement officials or members of fake government agencies in order to pressure people into making payments on their non-existent loans.

The groups were told to cease operations in September 2015 after collecting more than $5.2 million in fraudulent payments. A judge ordered the defendants to pay a $4.3 million fine, but they did not have the funds to cover that. The fee was then reduced to just $608,500.

On average, affected consumers will receive a check for $350.39 in the mail. These checks must be cashed within 60 days of the mailing date, or they will no longer be valid. According to the official report, “The FTC never requires consumers to pay money or to provide information before refund checks can be cashed.” If you receive a check in the mail and are asked to pay money to cash it, you should go to another check cashing facility.

If you have any questions about the refund, you may contact the FTC at 1-844-449-3587.

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LowCards.com does not include all credit card companies or every available credit card offer. Opinions expressed here are author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. Every reasonable effort has been made to maintain accurate information, however credit card offers change frequently. After you click on an offer you will be directed to the credit card issuer's secure web site where you can review the terms and conditions for your offer.